UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________to _________
Commission file number 0-14570
MCCOMBS REALTY PARTNERS
(Exact name of small business issuer as specified in its charter)
California 33-0068732
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
The issuer recently discovered that it had inadvertently omitted conformed
signatures on certain certifications included in its 10-QSB filing made November
14, 2002. Original signatures were complete and on file with the issuer at the
time the 10-QSB filing was made in November; however, due to a clerical error,
conformed signatures were not included in the electronic filing. This amendment
is being filed solely to correct this inadvertent clerical error.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MCCOMBS REALTY PARTNERS
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2002
Assets
Cash and cash equivalents $ 200
Receivables and deposits 25
Restricted escrow 78
Other assets 78
Investment property:
Land $ 499
Buildings and related personal property 6,031
6,530
Less accumulated depreciation (4,473) 2,057
$ 2,438
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 3
Tenant security deposit liabilities 17
Accrued property taxes 78
Other liabilities 127
Mortgage note payable 5,404
Partners' Deficit
General partner $ (1)
Limited partners (17,196.39 units
issued and outstanding) (3,190) (3,191)
$ 2,438
See Accompanying Notes to Consolidated Financial Statements
MCCOMBS REALTY PARTNERS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Revenues:
Rental income $ 336 $ 363 $ 990 $ 1,120
Other income 28 31 87 87
Total revenues 364 394 1,077 1,207
Expenses:
Operating 157 173 463 478
General and administrative 33 32 98 102
Depreciation 65 65 201 201
Interest 115 117 345 350
Property taxes 26 26 78 75
Total expenses 396 413 1,185 1,206
Net (loss) income $ (32) $ (19) $ (108) $ 1
Net income allocated to
general partner $ -- $ -- $ -- $ --
Net (loss) income allocated to
limited partners (32) (19) (108) 1
$ (32) $ (19) $ (108) $ 1
Net (loss) income per limited
partnership unit $ (1.86) $ (1.10) $ (6.28) $ .06
Distribution per limited
partnership unit $ -- $ -- $ 32.62 $ --
See Accompanying Notes to Consolidated Financial Statements
MCCOMBS REALTY PARTNERS
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' deficit at
December 31, 2001 17,196.39 $ -- $(2,521) $(2,521)
Distribution to partners (1) (561) (562)
Net loss for the nine months
ended September 30, 2002 -- -- (108) (108)
Partners' deficit at
September 30, 2002 17,196.39 $ (1) $(3,190) $(3,191)
See Accompanying Notes to Consolidated Financial Statements
MCCOMBS REALTY PARTNERS
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2002 2001
Cash flows from operating activities:
Net (loss) income $ (108) $ 1
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation 201 201
Amortization of loan costs 14 14
Bad debt expense 52 28
Change in accounts:
Receivables and deposits (54) (17)
Other assets (7) (12)
Accounts payable (12) 16
Tenant security deposit liabilities 6 (6)
Accrued property taxes (23) (8)
Other liabilities (9) (18)
Net cash provided by operating activities 60 199
Cash flows from investing activities:
Property improvements and replacements (107) (94)
Net deposits to restricted escrows (27) --
Net cash used in investing activities (134) (94)
Cash flows from financing activities:
Payments on mortgage note payable (59) (55)
Distribution to partners (562) --
Net cash used in financing activities (621) (55)
Net (decrease) increase in cash and cash equivalents (695) 50
Cash and cash equivalents at beginning of period 895 782
Cash and cash equivalents at end of period $ 200 $ 832
Supplemental disclosure of cash flow information:
Cash paid for interest $ 331 $ 335
See Accompanying Notes to Consolidated Financial Statements
MCCOMBS REALTY PARTNERS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of McCombs Realty
Partners (the "Partnership" or "Registrant"), a California limited partnership,
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The Partnership's general partner is CRPTEX,
Inc. (the "General Partner"). In the opinion of the General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and nine
month periods ended September 30, 2002 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2002. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 2001. The General Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust.
Note B - Plan of Reorganization
On March 9, 1987, the original general partners of the Partnership, on behalf of
the Partnership, filed a voluntary petition under Chapter 11 of the Federal
Bankruptcy Code in U.S. Bankruptcy Court, Central District of California
("Court"). The Partnership continued as Debtor-In-Possession to operate its
business in the ordinary course until the Court confirmed the Partnership's Plan
effective October 25, 1988. The Plan was approved by all required classes of
creditors.
The Plan required that the Partnership make certain payments to its secured
creditors and others on or before October 20, 1995. These payments were made on
or about June 25, 1995, when the Partnership refinanced the outstanding
mortgages encumbering the property. The Plan also required that the Partnership
make the following distributions on October 20, 1998, from available cash:
1) First, Limited Partners, both original and substitute, who made
additional capital contributions under the plan would receive a
repayment of the additional contributions totaling approximately
$730,000; if sufficient funds were unavailable to fully satisfy this
amount then a pro-rata portion would be paid based upon available
funds;
2) Second, Class 12 unsecured creditors ($23,100) would be paid on their
claims;
3) Third, Limited Partners who made additional capital contributions
and were original Limited Partners would receive a repayment of
their original capital contributions totaling approximately
$9,818,000; if sufficient funds were unavailable to fully satisfy
this amount then a pro-rata portion of available cash less a
pro-rata portion reserved for one third of the existing capital
contributions of non-contributing Limited Partners would be paid
based upon available funds;
4) Fourth, Limited Partners who did not make additional capital
contributions would receive a repayment of one-third of their
original capital contributions (i.e., one-third of $1,200,000); if
sufficient funds were unavailable to fully satisfy this amount then
a pro-rata portion would be paid based upon available funds.
Additionally, the Plan required CRPTEX, Inc. to make a capital contribution of
$14,500 and loan an additional $117,500 on behalf of the Partnership. The
Partnership received the $14,500 capital contribution but did not receive or
require the additional $117,500 to be loaned.
The payments required by number 2 above were timely made. With respect to the
amounts due to the Limited Partners under numbers 1, 3, and 4 above, there were
not sufficient funds available to completely satisfy these obligations at
October 20, 1998.
It was not anticipated that at October 20, 1998, there would be available funds
to fully satisfy the unsecured claims of the Limited Partners, as indicated
under the Plan. The limited partners were approached in August 1998 and asked to
either approve a sale of the Partnership's sole investment property or for the
General Partner to petition the Bankruptcy Court for an extension of the
settlement date. The required fifty-one percent response was not received. As a
result, the Partnership did not make any payments to the Limited Partners on
October 20, 1998, as required by the Plan from available funds. There is no
requirement, however, that the Partnership sell or again refinance the property
in order to pay in part or in whole, the payments to the Limited Partners
referred to above. The General Partner has determined that although all of the
required payments due under the Plan to the Limited Partners were not made that
the Partnership is not in any material financial default in connection with its
prior bankruptcy. In addition, the General Partner believes that it is proper
for the Partnership to continue operating under the terms of its Partnership
Agreement as modified by the Plan.
Since the expiration of the Plan on October 20, 1998, the General Partner had
reserved all excess cash to ensure that the Partnership would be able to meet
its operating and capital improvement needs rather than making pro-rata payments
to the limited partners in accordance with numbers 2, 4, and 5 above. During the
fourth quarter of 2001, the General Partner determined that the Partnership had
accumulated approximately $562,000 in excess funds. Approximately $530,000,
which had been reserved since 1998 to ensure that the property was fully able to
meet its operating and capital improvement needs with existing operating funds,
was distributed during the nine months ended September 30, 2002 in accordance
with number 2 above. In addition, approximately $32,000 was distributed from
recent operations during the nine months ended September 30, 2002. Any
additional funds will be distributed in accordance with the terms of the
Partnership Agreement as modified by the Plan.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and for reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership.
During the nine months ended September 30, 2002 and 2001, affiliates of the
General Partner were entitled to receive 5% of gross receipts from the
Partnership's investment property as compensation for providing property
management services. The Partnership paid to such affiliates approximately
$56,000 and $60,000 for the nine months ended September 30, 2002 and 2001,
respectively, which are included in operating expenses.
Affiliates of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $54,000 and $55,000 for the
nine months ended September 30, 2002 and 2001, respectively, which are included
in general and administrative expenses.
Beginning in 2001, the Partnership began insuring its property up to certain
limits through coverage provided by AIMCO which is generally self-insured for a
portion of losses and liabilities related to workers compensation, property
casualty and vehicle liability. The Partnership insures its property above the
AIMCO limits through insurance policies obtained by AIMCO from insurers
unaffiliated with the General Partner. During the nine months ended September
30, 2002 and 2001, the Partnership was charged by AIMCO and its affiliates
approximately $19,000 and $25,000, respectively, for insurance coverage and fees
associated with policy claims administration.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements in certain circumstances. The matters discussed
in this report contain certain forward-looking statements, including, without
limitation, statements regarding future financial performance and the effect of
government regulations. The discussions of the Registrant's business and results
of operations, including forward-looking statements pertaining to such matters,
do not take into account the effects of any changes to the Registrant's business
and results of operations. Actual results may differ materially from those
described in the forward-looking statements and will be affected by a variety of
risks and factors including, without limitation: national and local economic
conditions; the terms of governmental regulations that affect the Registrant and
interpretations of those regulations; the competitive environment in which the
Registrant operates; financing risks, including the risk that cash flows from
operations may be insufficient to meet required payments of principal and
interest; real estate risks, including variations of real estate values and the
general economic climate in local markets and competition for tenants in such
markets; and possible environmental liabilities. Readers should carefully review
the Registrant's financial statements and the notes thereto, as well as the risk
factors described in the documents the Registrant files from time to time with
the Securities and Exchange Commission.
The Partnership's investment property consists of one apartment complex. The
following table sets forth the average occupancy of the property for the nine
months ended September 30, 2002 and 2001:
Average Occupancy
Property 2002 2001
Lakewood at Pelham 89% 95%
Greenville, South Carolina
The General Partner attributes the decrease in occupancy at Lakewood at Pelham
to increased market competition as a result of the slowdown in the economy in
the Greenville area.
Results of Operations
The Registrant's net loss for the three and nine months ended September 30, 2002
was approximately $32,000 and $108,000, respectively, compared to a net loss of
approximately $19,000 and net income of approximately $1,000, respectively, for
the three and nine months ended September 30, 2001. The decrease in net income
for both the three and nine months ended September 30, 2002 is due to a decrease
in total revenues, partially offset by a decrease in total expenses. Total
revenues decreased for both the three and nine months ended September 30, 2002
due to a decrease in rental income. The decrease in rental income is primarily
due to the decrease in occupancy discussed above, a decrease in the average
rental rates charged, and an increase in bad debt expense at Lakewood at Pelham.
Other income remained relatively constant for both the three and nine months
ended September 30, 2002.
The decrease in total expenses for both the three and nine months ended
September 30, 2002 is primarily due to a decrease in operating expenses. The
decrease in total expenses for the nine months ended September 30, 2002 is also
due to a lesser extent to a decrease in interest expense. The decrease in
operating expenses for both the three and nine months ended September 30, 2002
is primarily due to a decrease in insurance expense as a result of a reduced
hazard insurance premium and management fees as a result of the decrease in
total revenues, partially offset by an increase in maintenance expense at the
property. The decrease in interest expense for the nine months ended September
30, 2002 is primarily a result of scheduled principal payments which reduced the
carrying balance of the mortgage encumbering the property. General and
administrative, depreciation, and property tax expenses remained relatively
constant for both the three and nine months ended September 30, 2002.
Included in general and administrative expenses at both September 30, 2002 and
2001 are management reimbursements to the General Partner allowed under the
Partnership Agreement. In addition, costs associated with the quarterly and
annual communications with investors and regulatory agencies and the annual
audit required by the Partnership Agreement are also included.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment property to assess the
feasibility of increasing rents, maintaining or increasing occupancy levels and
protecting the Partnership from increases in expenses. As part of this plan, the
General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At September 30, 2002, the Partnership had cash and cash equivalents of
approximately $200,000 as compared to approximately $832,000 at September 30,
2001. The decrease in cash and cash equivalents of approximately $695,000, from
the Partnership's calendar year end, is due to approximately $621,000 of cash
used in financing activities and approximately $134,000 of cash used in
investing activities, partially offset by approximately $60,000 of cash provided
by operating activities. Cash used in investing activities consisted of property
improvements and replacements and, to a lesser extent, net deposits to escrow
accounts maintained by the mortgage lender. Cash used in financing activities
consisted primarily of distributions to partners and, to a lesser extent,
payments of principal made on the mortgage encumbering the Partnership's
investment property. The Partnership invests its working capital reserves in
interest bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership and to comply with Federal, state
and local legal and regulatory requirements. The General Partner monitors
developments in the area of legal and regulatory compliance and is studying new
federal laws, including the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act
of 2002 mandates or suggests additional compliance measures with regard to
governance, disclosure, audit and other areas. In light of these changes, the
Partnership expects that it will incur higher expenses related to compliance,
including increased legal and audit fees. Capital improvements planned at the
Partnership's investment property are detailed below.
For 2002, the Partnership has budgeted approximately $109,000 for capital
improvements at Lakewood at Pelham, consisting primarily of interior building
improvements, lighting, and floor covering replacement. The Partnership
completed approximately $107,000 in capital expenditures at Lakewood at Pelham
as of September 30, 2002, consisting primarily of structural and interior
building improvements, air conditioning unit upgrades, and floor covering
replacement. These improvements were funded from operations and replacement
reserves. Additional improvements may be considered and will depend on the
physical condition of the property as well as the anticipated cash flow
generated by the property and replacement reserve balances.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.
The mortgage indebtedness on Lakewood at Pelham of approximately $5,404,000 is
being amortized over 30 years with a balloon payment due July 2005. The General
Partner may attempt to refinance such indebtedness and/or sell the property
prior to such maturity date. If the property cannot be refinanced or sold for a
sufficient amount, the Partnership will risk losing such property through
foreclosure.
On March 9, 1987, the original general partners of the Partnership, on behalf of
the Partnership, filed a voluntary petition under Chapter 11 of the Federal
Bankruptcy Code in U.S. Bankruptcy Court, Central District of California
("Court"). The Partnership continued as Debtor-In-Possession to operate its
business in the ordinary course until the Court confirmed the Partnership's Plan
of Reorganization (The "Plan") effective October 25, 1988. The Plan was approved
by all required classes of creditors.
The Plan required that the Partnership make the following payments on October
20, 1998:
1) First, all existing creditors, except prebankruptcy Class 12 creditors
($23,100), would be satisfied;
2) Limited Partners, both original and substitute, who made additional
capital contributions under the plan would receive a repayment of
the additional contributions totaling approximately $730,000; if
sufficient funds were unavailable to fully satisfy this amount then
a pro-rata portion would be paid based upon available funds;
3) Class 12 creditors would be paid claims aggregating $23,100;
4) Limited Partners who made additional capital contributions and were
original Limited Partners would receive a repayment of their
original capital contributions totaling approximately $9,818,000; if
sufficient funds were unavailable to fully satisfy this amount then
a pro-rata portion would be paid based upon available funds;
5) Limited Partners who did not make additional capital contributions
would receive a repayment of one-third of their original capital
contributions (i.e., one-third of $1,200,000); if sufficient funds
were unavailable to fully satisfy this amount then a pro-rata
portion would be paid based upon available funds.
Additionally, the Plan required CRPTEX, Inc. to make a capital contribution of
$14,500 and loan or expend an additional $117,500 on behalf of the Partnership
on an as-needed basis. The Partnership received the $14,500 capital contribution
but did not require the additional $117,500 to be loaned.
The payments required by numbers 1 and 3 above were timely satisfied. In
addition, all other claims provided for in the Plan then outstanding were
settled on June 25, 1995 when the Partnership refinanced the then outstanding
mortgages encumbering the property. With respect to the amounts due to the
Limited Partners under numbers 2, 4, and 5 above there were not sufficient funds
available to completely satisfy these obligations at October 20, 1998.
It was not anticipated that at October 20, 1998 there would be available funds
to fully satisfy the unsecured claims of the Limited Partners, as indicated
under the Plan. The limited partners were approached in August 1998 and asked to
either approve a sale of the Partnership's sole investment property or for the
General Partner to petition the Bankruptcy Court for an extension of the
settlement date. The required fifty-one percent response was not received. As a
result, the Partnership did not make any payments to the Limited Partners on
October 20, 1998 as required by the Plan from available funds. There is no
requirement, however, that the Partnership sell or again refinance the property
in order to pay in part or in whole, the payments to the Limited Partners
referred to above. The General Partner has determined that although all of the
required payments under the Plan to the Limited Partners were not made that no
default exists and that it is proper for the Partnership to continue operating
under the terms of its Partnership Agreement as modified by the Plan.
Since the expiration of the Plan on October 20, 1998, the General Partner had
reserved all excess cash to ensure that the Partnership would be able to meet
its operating and capital improvement needs rather than making pro-rata payments
to the limited partners in accordance with numbers 2, 4, and 5 above. During the
fourth quarter of 2001, the General Partner determined that the Partnership had
accumulated approximately $562,000 in excess funds. Approximately $530,000
($30.82 per limited partnership unit) which had been reserved since 1998 to
ensure that the property was fully able to meet its operating and capital
improvement needs with existing operating funds was distributed during the nine
months ended September 30, 2002 in accordance with number 2 above. In addition,
approximately $32,000 (approximately $31,000 to the limited partners or $1.80
per limited partnership unit) was distributed from recent operations during the
nine months ended September 30, 2002. Any additional funds will be distributed
in accordance with the terms of the Partnership Agreement as modified by the
Plan.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 3,686.5 limited partnership units in
the Partnership representing 21.44% of the outstanding Units at September 30,
2002. A number of these Units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will
acquire additional units of limited partnership interest in the Partnership in
exchange for cash or a combination of cash and units in the operating
partnership of AIMCO either through private purchases or tender offers. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters which would include
voting on certain amendments to the Partnership Agreement and voting to remove
the General Partner. Although the General Partner owes fiduciary duties to the
limited partners of the Partnership, the General Partner also owes fiduciary
duties to AIMCO as its sole stockholder. As a result, the duties of the General
Partner, as general partner, to the Partnership and its limited partners may
come into conflict with the duties of the General Partner to AIMCO, as its sole
stockholder.
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to make estimates and assumptions. The Partnership believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.
Impairment of Long-Lived Assets
Investment property is recorded at cost, less accumulated depreciation, unless
considered impaired. If events or circumstances indicate that the carrying
amount of a property may be impaired, the Partnership will make an assessment of
its recoverability by estimating the undiscounted future cash flows, excluding
interest charges, of the property. If the carrying amount exceeds the aggregate
future cash flows, the Partnership would recognize an impairment loss to the
extent the carrying amount exceeds the fair value of the property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include changes in the
national, regional and local economic climate; local conditions, such as an
oversupply of multifamily properties; competition from other available
multifamily property owners and changes in market rental rates. Any adverse
changes in these factors could cause an impairment in the Partnership's assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned. The
Partnership will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area.
Concessions are charged to income as incurred.
ITEM 3. CONTROLS AND PROCEDURES
The principal executive officer and principal financial officer of the General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal financial officer, respectively, have, within 90 days of the
filing date of this quarterly report, evaluated the effectiveness of the
Partnership's disclosure controls and procedures (as defined in Exchange Act
Rules (13a-14(c) and (15d-14(c)) and have determined that such disclosure
controls and procedures are adequate. There have been no significant changes in
the Partnership's internal controls or in other factors that could significantly
affect the Partnership's internal controls since the date of evaluation. The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 3.1, Amended and Restated Certificate and Agreement of
Limited Partners of McCombs Realty Partners, a California
Limited Partnership, incorporated by reference to the exhibits
to the Registrant's Annual Report filed on Form 10-K, filed on
April 13, 1990.
Exhibit 3.2, Certificate of Limited Partnership of the
Partnership, incorporated by reference to the exhibits to the
Registrant's Annual Report filed on Form 10-K, filed on April
13, 1990.
Exhibit 99, Certification of Chief Executive Officer and Chief
Financial Officer
b) Reports on Form 8-K:
Current Report on Form 8-K/A dated June 27, 2002 and filed on
July 16, 2002, disclosing the dismissal of KPMG LLP as the
Registrant's certifying auditor and the appointment of Ernst &
Young LLP, as the certifying auditor for the year ending
December 31, 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MCCOMBS REALTY PARTNERS
By: CRPTEX, INC.
General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Thomas C. Novosel
Thomas C. Novosel
Senior Vice President
and Chief Accounting Officer
Date: January 9, 2003
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of McCombs Realty
Partners;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 13, 2002
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of CRPTEX, Inc.,
equivalent of the chief executive officer of
the Partnership
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of McCombs Realty
Partners;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 13, 2002
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of CRPTEX, Inc., equivalent of the
chief financial officer of the Partnership
Exhibit 99
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of McCombs Realty
Partners (the "Partnership"), for the quarterly period ended September 30, 2002
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Patrick J. Foye, as the equivalent of the chief executive officer of
the Partnership, and Paul J. McAuliffe, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: November 13, 2002
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: November 13, 2002
This certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the
Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.